Correlation Between Snowflake and Movella Holdings

Can any of the company-specific risk be diversified away by investing in both Snowflake and Movella Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Snowflake and Movella Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Snowflake and Movella Holdings, you can compare the effects of market volatilities on Snowflake and Movella Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Snowflake with a short position of Movella Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snowflake and Movella Holdings.

Diversification Opportunities for Snowflake and Movella Holdings

0.21

Correlation Coefficient

Snowflake  Movella Holdings

Modest diversification

The 3 months correlation between Snowflake and Movella is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Snowflake and Movella Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Movella Holdings and Snowflake is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Snowflake are associated (or correlated) with Movella Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Movella Holdings has no effect on the direction of Snowflake i.e., Snowflake and Movella Holdings go up and down completely randomly.

Pair Corralation between Snowflake and Movella Holdings

If you would invest  11,284  in Snowflake on September 16, 2024 and sell it today you would earn a total of  5,483  from holding Snowflake or generate 48.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.54%
Values	Daily Returns

Snowflake  vs.  Movella Holdings

Snowflake

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Snowflake are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Snowflake showed solid returns over the last few months and may actually be approaching a breakup point.

Movella Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Movella Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Movella Holdings is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Snowflake and Movella Holdings

The main advantage of trading using opposite Snowflake and Movella Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snowflake position performs unexpectedly, Movella Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Movella Holdings will offset losses from the drop in Movella Holdings' long position.

The idea behind Snowflake and Movella Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.